Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q3 2019 Earnings Presentation
24 slides from Onemain's earnings presentation, Oct 29, 2019
Slide 1: 3Q 2019 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 3Q 2019 Earnings Presentation October 29th, 2019
Slide 2: Important Information
Important Information This document contains summarized information concerning OneMain Holdings, Inc. (the “Company”) and the Company’s business, o perations, financial performance and trends. No representation is made that the information in this document is complete. For additional financial, stat
Slide 3: Important Information: Use of Non-GAAP Financial Measures
Important Information Use of Non-GAAP Financial Measures We report the operating results of Consumer and Insurance, Acquisitions and Servicing, and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for interest expense and operating costs, to reflect the manne
Slide 4: 3Q19 Executive Summary
3Q19 Executive Summary ▪ Net income of $248MM and diluted EPS of $1.82 Financial ▪ C&I adjusted net income* of $241MM and adjusted diluted EPS* of $1.77, up 35% vs. Performance 3Q18 ▪ ROA* of 4.5%; C&I ROR* of 5.5% ▪ Portfolio secured mix of 51% Receivables ▪ C&I ending net receivables* of $17.8B, u
Slide 5: 3Q19 Financial Performance
3Q19 Financial Performance ($ in millions, except Average Net Receivables in billions, and per share statistics) Consistently generating superior returns Earnings Summary C&I Adjusted Earnings Summary* 3Q19 2Q19 3Q18 3Q19 2Q19 3Q18 Consumer & Insurance* $317 $291 $235 Interest Income $1,060 $999 $93
Slide 6: Net Income Trends
Net Income Trends ($ in millions) C&I adjusted net income up 35% year over year Net Income GAAP Net Income C&I Adjusted Net Income* (1) $248 $241 $221 $189 $194 $187 $179 $168 $148 $152 3Q18 4Q18 1Q19 2Q19 3Q19 ROA/ C&I ROR* 2.9% 4.6% 3.3% 4.7% 2.9% 4.7% 3.7% 5.4% 4.5% 5.5% *See appendix for reconci
Slide 7: Receivables (C&I)
Receivables (C&I)* ($ in billions) Consistent and disciplined receivables growth Ending Net Receivables (“ENR”) 3Q19 Key Highlights $17.8 ▪ Originations of $3.7, up from $2.9 in 3Q18 $17.0 $16.2 $16.2 ▪ Secured originations 55% of total, up from 54% $15.8 in 3Q18 ▪ Portfolio ENR 51% secured, up from
Slide 8: Credit Metrics (C&I)
Credit Metrics (C&I)* ($ in millions) Credit trends remain stable 30-89 Days Delinquent 90+ Days Delinquent $393 $411 $369 $365 $366 $337 $343 $322 $313 $293 2.4% 2.3% 2.3% 2.3% 2.1% 1.9% 2.0% 2.1% 1.9% 1.7% 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Net Charge-offs 3Q19 Key Highlights $284 $
Slide 9: Operating Expense (C&I)
Operating Expense (C&I)* ($ in millions, ANR $ in billions) Driving operating leverage while reinvesting in our business (3) Operating Expense & OpEx Ratio $963 $934 $335 $320 $319 $312 $309 8.2% 8.2% 7.8% 7.7% 7.7% 7.7% 7.6% 3Q18 4Q18 1Q19 2Q19 3Q19 YTD '18 YTD '19 ANR $15.6 $16.0 $16.2 $16.6 $17.5
Slide 10: Funding & Capital
Funding & Capital ($ in billions) Diverse funding with strong capital and liquidity 3Q19 Funding & Liquidity Activity (2) ▪ Issued $1.7 of 7-year revolving ABS at a blended ▪ Liquidity runway of 24+ months rate of 3.5% ▪ Unencumbered receivables of $8.5 ▪ Undrawn conduit capacity increased to $6.9 ▪
Slide 11: 2019 Strategic Priorities
2019 Strategic Priorities Building shareholder value while reinvesting in our business 2019E 2018A* 2019E Updated Yield 23.9% Stable Stable C&I Segment Metrics Net Charge-offs 6.5% < 6.5% 6.1 to 6.3% Operating Expense $1.2B +3% +3% C&I Ending Net $16.2B +5 to 10% +12 to 14% Balance Receivables Sheet
Slide 12: Powerful model driving differentiated performance
Powerful model driving differentiated performance ▪ Hybrid operating model with enhanced digital and analytical capabilities driving Differentiated strong returns and 35% YOY C&I net income* growth Business Model ▪ Deep customer relationships, disciplined underwriting, and secured lending enable dif
Slide 13: Appendix
Appendix 13
Slide 14: Consolidated Income Statements
Consolidated Income Statements (unaudited, $ in millions, except per share statistics) 3Q19 2Q19 1Q19 4Q18 3Q18 FY18 FY17 Finance Charges $1,062 $998 $953 $954 $930 $3,645 $3,183 Finance Receivables Held for Sale 3 2 3 4 3 13 13 Total Interest Income 1,065 1,000 956 958 933 3,658 3,196 Interest Expe
Slide 15: Consolidated Balance Sheets
Consolidated Balance Sheets (unaudited, $ in millions) 9/30/19 6/30/19 3/31/19 12/31/18 9/30/18 Cash and Cash Equivalents $1,393 $786 $1,709 $679 $1,243 Investment Securities 1,779 1,721 1,743 1,694 1,707 Net Finance Receivables 17,791 16,980 16,136 16,164 15,750 Unearned Insurance Premium and Claim
Slide 16: Balance Sheet Metrics
Balance Sheet Metrics (unaudited, $ in millions) 9/30/19 6/30/19 3/31/19 12/31/18 9/30/18 Total Assets $22,410 $21,017 $21,358 $20,090 $20,468 Less: Goodwill (1,422) (1,422) (1,422) (1,422) (1,422) Less: Other Intangible Assets (352) (362) (372) (388) (398) Tangible Managed Assets $20,636 $19,233 $1
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 3Q19 2Q19 1Q19 4Q18 3Q18 FY18 FY17 Consumer & Insurance $312 $270 $232 $234 $226 $787 $676 Acquisitions & Servicing (1) 6 0 0 0 1 1 Other (1) (3) (3) (9) (4) (132) (41) Segment to GAAP Adjustment (13) (17) (27) (11) (23) (32) (205) Incom
Slide 18: Reconciliation of Non-GAAP Measures (continued)
Reconciliation of Non-GAAP Measures (continued) (unaudited, $ in millions) 9/30/19 6/30/19 3/31/19 12/31/18 9/30/18 Consumer & Insurance $17,825 $17,016 $16,170 $16,195 $15,777 Acquisitions & Servicing 0 0 0 0 0 Other 0 0 0 0 0 Segment to GAAP Adjustment (34) (36) (34) (31) (27) Net Finance Receivab
Slide 19: Consumer & Insurance Segment (Non-GAAP)
Consumer & Insurance Segment (Non-GAAP) (unaudited, $ in millions, except per share statistics) 3Q19 2Q19 1Q19 4Q18 3Q18 FY18 FY17 Interest Income $1,060 $999 $954 $959 $935 $3,677 $3,305 Interest Expense (238) (232) (229) (220) (218) (844) (765) Provision for Finance Receivables Losses (277) (263)
Slide 20: Consumer & Insurance Segment Metrics (Non-GAAP)
Consumer & Insurance Segment Metrics (Non-GAAP) (unaudited) 3Q19 2Q19 1Q19 4Q18 3Q18 FY18 FY17 Revenue (1) 26.5% 26.8% 26.6% 26.4% 26.3% 26.2% 26.6% Net Charge-Off (5.2%) (6.2%) (7.1%) (6.3%) (5.8%) (6.5%) (7.0%) Risk Adjusted Margin 21.3% 20.6% 19.5% 20.1% 20.5% 19.8% 19.6% Operating Expenses (7.6%
Slide 21: Consumer & Insurance Credit Metrics (Non-GAAP)
Consumer & Insurance Credit Metrics (Non-GAAP) (unaudited, $ in millions) 3Q19 2Q19 1Q19 4Q18 3Q18 FY18 FY17 Gross Charge-Off $263 $294 $316 $285 $260 $1,127 $1,100 Gross Charge-Off Ratio 6.0% 7.1% 7.9% 7.1% 6.6% 7.3% 7.9% Recovery $36 $38 $32 $30 $31 $129 $129 Recovery Ratio 0.8% 0.9% 0.8% 0.8% 0.8
Slide 22: Acquisitions and Servicing Segment (Non-GAAP)
Acquisitions and Servicing Segment (Non-GAAP) (unaudited, $ in millions) 3Q19 2Q19 1Q19 4Q18 3Q18 FY18 FY17 Portfolio Servicing Fees from SpringCastle $4 $5 $7 $7 $8 $33 $40 Other 0 0 0 0 0 0 2 Total Other Revenues 4 5 7 7 8 33 42 Operating Expenses (5) (6) (7) (7) (8) (32) (41) Total Other Expenses
Slide 23: Other (Non-GAAP)
Other (Non-GAAP) (unaudited, $ in millions) 3Q19 2Q19 1Q19 4Q18 3Q18 FY18 FY17 Finance Charges $0 $0 $0 $0 $2 $7 $12 Finance Receivables Held for Sale 2 2 3 4 2 10 11 Interest Expense (1) (1) (2) (4) (4) (17) (21) Provision for Finance Receivable Losses 0 0 0 0 0 5 (7) Net Interest Income (Loss) aft
Slide 24: Glossary
Glossary Select Calculations: • Adjusted Debt = Long-Term Debt – Junior Subordinated Debt • Adjusted Tangible Common Equity (TCE) = Total Shareholders’ Equity – Goodwill – Other Intangible Assets + Junior Subordinated Debt • Available Cash and Cash Equivalents = Cash and Cash Equivalents – Cash and